bts cp business best practice process design cp business best practice process design ... •bridge...

BTS CP Business Best Practice Process Design

Carola Feind-Just

Head Consumer Products MEE

Business Transformation Services

© 2013 SAP AG. All rights reserved. 2

SAP CP Business Best-Practices are the pre-defined reference content for

defining, managing and measuring processes

• Implement systematic business process management and performance monitoring based on

business best practice information

• Design industry best practice buiness processes without separate As Is process analysis

• Bridge the gap between IT and business based on SAP business best practices

Goal of

the approach

Extensive business best practice process content

available out-of-the-box

Quick and efficient blueprinting is enabled

Business best practice content is

available for all CP core process areas

Content is based on SAP experience

with major global CP customers

Available Business Best Practice content as

basis for process management


Process flows

Organizational structure

IT support

SAP

Business

Best Practice

Content

• Process standards and rules

• Defined KPI’s and PPI’s

• Roles/ Responsibilities

• Meeting structures

• Applications supporting the processes

• Extensions, user exits, modifications

Business process management needs to consider process flows,

organizational structures and IT support


Key element of the business best-practice content are out-of-the box

available described business rules & principles for processes, organization

and IT

Which rules & principles

need to be followed for a

business process to be best-

practice?

Process flows

Organizational

structure

IT support

KPI / PPI trees

to measure process

performance

Benefits

to be expected by

implementing the best-

practice

Customer Examples

of best-practice

implementation


BTS CP best practice methodology is an efficient

approach to design to-be processes and identify process

optimization initiatives

Interviews Best Practice

Interviews/ Workshops Process Design Initiatives

Level Level 1 Level 2 Level 3 Level 4

1 04 Supply Chain Planning

2 04.01 Demand planning

3 04.01.01 Sales history evaluation

4 04.01.01.01 Clean up sales history data

4 04.01.01.02 Maintain promotion samples

3 04.01.02 Uplift planning (Optional)

4 04.01.02.01 Determine basis for new promotion

4 04.01.02.02 Create new promotion

4 04.01.02.03 Maintain influence of promotion on baseline

4 04.01.02.04 Review of current promotions

3 04.01.03 Baseline planning

4 04.01.03.01 Adapt Data for new, dropout & seasonal products

4 04.01.03.02 Select forecast model

4 04.01.03.03 Generate statistical forecast

4 04.01.03.04 Finalize sales forecast

4 04.01.03.05 Reconcile Demand & Promotion Plan

3 04.01.04 Demand plan consensus

4 04.01.04.01 Achieve Demand Plan Consensus

4 04.01.04.02 Release DP to supply planning

2 04.02 Vendor managed inventory

3 04.02.01 Release DP to supply planning

4 04.02.01.01 Retailer consolidates & sends data to manufacturer

4 04.02.01.02 Load retailer DC or store level data (sales, inventory, etc.)

4 04.02.01.03 Load retailer or manufacturer promotion data

4 04.02.01.04 Cleanse & harmonize data

4 04.02.01.05 Simulate data

3 04.02.02 Statistical forecast

SAP OneWorld

Consumer Products Process Map

1 2 3 4

Understand key process

differences between the

customer’s business

units / countries

As-is processes and

key differences

understood

Reference Process

Framework


Daily Discuss and resolve order exceptions

Discuss and resolve credit blocks with Credit Control

Discuss and resolve product availability issues

Weekly

Monthly

Analyze reasons for order fulfillment failure for main customers

Discuss and solve deductions, credit notes, and overdue accounts

Analyze and define actions for claims, returns, refusals

Agree on action plan for products in short supply

Update on promotions/events, customer prioritization etc.

Consider planned Warehouse and Transportation issues

Meeting Topics

ARCS

Meeting

Participants

S

ARCS PL S

CS P S

CS S

CS

ARCS PL P S

ARCS S

CS PL P S

AR

CS

CS

ARCS PL P SCustomer

Service

Accounts

Receivable

Physical

Logistics

Demand

Supply

Planning

Sales

Meeting

Frequency

Illustrative

P

Analyze KPI’s and reasons for failure, plan improvement I.e.

Review trade debtors and risk categories

Review sales forecast against demand & supply planning

To ensure the success of One Face to the Customer, internal alignment is

essential (1/2)


Key Principles & Rules – Exception-based Order Management and Order

Monitoring (1/2)

(1) Customer Service is monitoring order status on a regular basis at defined points in time (daily

schedule)

(2) Orders are monitored throughout entire order cycle from order entry and scheduling to delivery, billing

and payment

(3) Exceptions are raised automatically by the order management system and feed into CS work list

(4) Customer Service frequently reviews exception reporting and work lists as part of a daily activity

schedule including e.g.:

i. EDI errors to identify errors in order transmission process

ii. Inaccurate Orders (e.g. EDI input doesn’t match system determined values)

iii. Non-confirmed order lines report to identify stock-out situations (including allocation , ATP

failures non-authorised products)

iv. Review ‘at risk’ orders (orders committed against expected inventory)

v. Blocked orders with reason codes for further analysis and action (e.g. credit block)

vi. Business rules compliance check (efficient unit loads, order quantities etc.)

vii. Returns report to identify not processed returns

viii. Physical Logistics issues with real-time visibility

ix. Proof-of-Deliver (POD) confirmation report

x. Delivery discrepancies report

Rules & Principles: Exception-based Order Management and Order Monitoring (1/2)

Pre-defined best-

practice content

Define rules & principles

for to-be processes

based on best practice

material

Rules & Principles for

to-be processes

defined

Process Steps

(Level 4) RACIExecuting

RoleDescription/ Rules& Principles/ Variants

Process Objective KPIs

08.06.01.01

Receive order

08.06.01.02

Order entry

R

C

C

I

ISales deskmanager/ System

Automated order entry has to follow the principle to reduce the

number of touches for the whole organization.

Sy

ste

m

Cre

dit

Ma

na

ge-

me

nt,

Su

pp

lyC

ha

in

Sa

les

, S

hip

ping

De

pa

rtm

en

t

R/A

R/A

Cu

sto

me

r S

erv

ice

09 St or age & Dist ribution

09. 01 Delivery planning & mgm t

09. 02 Tr ansp. planning & execut ion

09. 04 Outbound logistics

09. 06 Returns & r ef usals mgmt

08 Sales

08. 06 Or der mgmt & execution

08. 07 Claim s mgmt

10 Finance

10. 01 Cr edit mgmt

10. 02 Stocks m gmt

10. 03 Account s receivable

10. 04 Fact or ing

Sales deskmanager

A customer order can be received via EDI, web, fax, email,

phone call.

08.06.01 Receive and enter order

– Process Description

Process Steps

(Level 4) RACIExecuting

RoleDescription/ Rules& Principles/ Variants


08.06.01.01

Receive order

08.06.01.02

Order entry

R

C

C

I

ISales deskmanager/ System



Sy

ste

m

Cre

dit

Ma

na

ge-

me

nt,

Su

pp

lyC

ha

in

Sa

les

, S

hip

ping

De

pa

rtm

en

t

R/A

R/A

Cu

sto

me

r S

erv

ice

09 St or age & Dist ribution

09. 01 Delivery planning & mgm t

09. 02 Tr ansp. planning & execut ion

09. 04 Outbound logistics

09. 06 Returns & r ef usals mgmt

08 Sales

08. 06 Or der mgmt & execution

08. 07 Claim s mgmt

10 Finance

10. 01 Cr edit mgmt

10. 02 Stocks m gmt

10. 03 Account s receivable

10. 04 Fact or ing

Sales deskmanager

A customer order can be received via EDI, web, fax, email,

phone call.



Process Documentation

Templates

Design to-be processes

according to agreed

rules & principles

To-be processes

documented

Cost reduction

potential

Low hanging fruits Long-term benefits

low

medium

high

Value Realization

Time

Evaluation Criteria for

Initiatives

Prioritize identified

optimization initiatives (e.g.

tools to be implemented,

processes to be rolled out)

Optimization initiatives

prioritized


SAP BTS provides a Consumer Products Process map to structure

Process Analysis and Design

1

• Industry process map

• SAP internally aligned

across all key Business

units

• Based on industry

standards

• Can be mapped to

industry standards like

AFPQ, SCOR, …

Business Best

Practices are

integrated in the

different

process areas

Excel process map


All Business Best Practices are described in a standard format and will be

discussed in workshops with business participation

2

Each of the business best

practices consists of a set of

10 – 25 key rules and principles which

have to be discussed during the

workshops and assessed regarding

adoption, modification, variants


Best-Practice rules & principles are adapted to fit the customer‘s situation

(5) Reasons for exceptions need to be documented systematically with reason codes to be able to

analyze cause and to initiated corrective actions

(6) Original and the final order details (qty., delivery date, plant, shipping point, prices, etc.) need to be

kept to facilitate audit compliance and reporting

(7) In case of any potential issues CS proactively communicates to customers.

(8) Rules to systematically evaluate orders and determine exceptions are defined and implemented

(9) Clear roles and responsibilities for processing exception work lists are defined for different people or

groups (to avoid duplication of work and/or omission of tasks)

(10) Effectiveness of check rules and exceptions are regularly reviewed and adjusted in order to improve

process effectiveness of checks and improve process efficiency

(11) CS is tracking the number of exceptions to manage workloads and workforce planning

(12) CS is measured upon exception resolution rate and resolution time

(13) Automated order entry (EDI, Web-ordering) is encouraged, orders flow through the remaining

process (credit check, fulfillment, billing) without manual interventions

(14) Customer Service Cockpit is available as comprehensive entry point to all OM related activities (e.g.

handle order monitoring and exceptions ‘on one screen’, customer data, communication with

customer, invoices, shipping documents, claims, returns)

(15) Workflow processes support involvement for different functions to resolve exceptions effectively

Rules & Principles: Exception-based Order Management and Order Monitoring (2/2)

Red: to be discussed

Blue: potentially irrelevant

for Company


Adopted Business Best Practices are transferred into level 4 processes

based on the workshop results and the reference process map

3

Consumer Products industry

process map level 1 - 4

Organizational units, roles/ res-

ponsibilities affected by

best practices discussed during

the workshop

Processes affected by

best practices discussed

during the workshop


To-Be processes are then documented in the format agreed with the customer

Process Steps

(Level 4) RACI

Executing

Role Description/ Rules& Principles/ Variants


08.06.01.01

Receive order

08.06.01.02

Order entry

R

C

C

I

I Sales desk

manager/

System



Syste

m

Cre

dit M

anage-

ment,

Supply

Chain

Sale

s, S

hip

pin

g

Depart

ment

R/A

R/A

Custo

mer

Serv

ice

09 Storage & Distribution

09.01 Delivery planning & mgmt

09.02 Transp. planning & execution

09.04 Outbound logistics

09.06 Returns & refusals mgmt

08 Sales

08.06 Order mgmt & execution

08.07 Claims mgmt

10 Finance

10.01 Credit mgmt

10.02 Stocks mgmt

10.03 Accounts receivable

10.04 Factoring

Sales desk

manager A customer order can be received via EDI, web, fax, email,

phone call.



Identfication of the

process in overall

order-to-cash scope

Relevant KPIs to

measure process

quality

Description of level 4 to-be

process, directly reflecting

rules & principles that have

been defined on level 3

Level 3 process

Level 3 process

description and

objective

Functions

involved in the

process step

Role executing

the process

step

Level 4 process

steps


All potentials are described in detail to provide the basis for the

prioritization of the initiatives to be implemented

Description of the

potential and the

relevant process area

Benefit description

Description of change

impacts each sub-

company

Description of

measures to realize

potential effort

Relation to overall

program goals

Status discussion on

benefits

Business & IT implications

4


Main focus of process and organizational design are process levels 3 and 4

Inte

gra

tion

In

tegra

tion

Process level 3

Process level 4

Process level 6

Process level 1

Process level 2

Process level 5

Business

Ownership

IT Ownership

08 Sales

08.06 Order management &

execution

08.06.01 Order receive, enter

and validation

08.06.01.02 Enter order

08.06.01.02. ...

08.06.01.02. ...


Main focus of process and organizational design are business process and

sub-process levels

Organization and Planning Reverse Logistics

(1) Customer Service is a single point of contact for all customer Returns and is responsible to coordinate

resolution with involved parties and communication to the customer

(2) Business rules are defined for Returns defining requirements for documentation, authorization and

maximum resolution time

(3) Where possible, Reverse Logistics strategy is planned for new product launches as a part of the

product strategy

(4) Clear instructions on company’s return policy are defined with customers where possible and are

easily accessible for customers (available electronically and where appropriate on product packaging,

with delivery documents or through product managers)

(5) The 'no returns' policy is implemented with customers where appropriate, and is strictly controlled to

ensure that all non-saleable goods are destroyed. Customer audits on product disposal compliancy

are conducted

(6) Where appropriate, in case of product discontinuation by the company or customer, clear guidelines

are communicated internally and externally on how to process

Rules & Principles: Reverse Logistics (1/3)

08.06.02.07 Per-

form credit check

10.01 Credit

Management

10.03 Accounts

Receivable

Interface

Interface

Description/ Rules& Principles/ VariantsRACIProcess Steps

Syste

m

Cre

dit

Man

age-

men

t,

Acco

un

ts

Receiv

able

Ccusto

mer

Serv

ice

R A C

R A C

Credit check uses the centrally def ined credit check rules as input that

are developed in Credit Management

10.01.01 Credit Limits Management: Central credit limit is def ined by

cross-functional team (see slide XX) and cascaded to the companies

dealing with the customer through a def ined logic

10.01.03 Credit Master Maintenance: credit check rules that are

maintained in the customer credit master are required as input for the

credit check

Credit check rules refer to credit-relevant information f rom the customer

account and include, but are not limited to customer credit limit, dunning

level, days sales outstanding

input

input

Credit check uses the customer open items as well as other credit-

relevant data (e.g. dunning transactions, oldest open item, last payment,

DSO) maintained in Accounts Receivable as input for credit check

Normally, open items are reported to Credit Management once each

day af ter all incoming and outgoing payments have been processed in

AR

Customer credit exposure and payment behaviour summary are

updated based on this information and the current order value

Business Process

Level

Sub-process

Level

Process Activity Level

Process levels 1-2 Strategic guidelines, general

operating model of the company

Cle

ar

an

d w

ell

str

uctu

red T

op

-Do

wn-A

pp

roa

ch

has t

o b

e a

dopte

d

Typically no systematic

definitions or documentation

on business process and sub-

process levels available

Inte

gra

tion

Inte

gra

tion

Multiple formats

throughout the company

Typically

documentation

available from system

implementations

© 2014 SAP SE All rights reserved. 14

SAP Business Best Practices are mapped to end-to-end processes

05 Purchasing

06 Manufacturing &

Quality Mgmt

10 Finance

05.03

Operational

Procurement

06.04 Inbound

Logistics

05.02 Purchase

Agreemt. Mgmnt

10.06 Accounts

Payable

05.06 Supplier

Settlement

Procure-to-Pay

Efficient Procurement Organization

Spend Category Management

Manage Purchasing Agreements

Efficient Procurement of Services and Indirect Materials

Efficient Invoice Management

Streamline & Automate AP Processes

Vendor Returns / Claims

Inbound Material Management (operational)

P2P

Best

Practices

Potentially

excluded from

P2P scope


Best-practice information is the efficient baseline for establishing a business process management framework

Customer

challenges

Roll-outs are not as efficient and fast as they

could be

Roll-out efforts are up to 30% higher than

they could be with a structured template

No defined continuous improvement

process, processes are not systematically

adapted to changing environments

Multiple small IT and Process optimization

projects are running without clear link to a

„template“ solution

Process ownership is not systematically

defined

No clear description of roles and responsibili-

ties, no clear process governance

Business processes not systematically

documented

No common documentation standards, diffe-

rent business processes based on IT solution

No process performance framework / KPIs

in place

Benefits vs. costs of process improvement

projects cannot be tracked and evaluated

Best-practice methodology is used to meet customer challenges in

continuous improvement

© 2013 SAP AG. All rights reserved. 16 Internal

Initiatives are prioritized at the end of Design, based on pre-defined criteria

Initiative COM CO FI HR OPS PUR RM

Harmonize and streamline structures within sales3

Initiative lead streams Initiative affected streams

2 Harmonize tactical sales and supply planning

8 Harmonize subcontracting processes

4 Increase automation of purchasing processes

9 Harmonize supplier management

5 Harmonize and streamline order to cash process

11 Harmonize sales contract management

12 Harmonize intercompany trade

1 Harmonize operational supply planning

10 Optimize material groups

6 Centralize & improve master data management processes

7 Standardize & further professionalize FI & CO processes

Very high harmonization benefit Harmonization benefit for Template Optimization

• Initiatives are

prioritized based on

the benefits and

harmonization

achievement

• Functional

dependencies are

strongly considered

Contact

Contact information:

Carola Feind-Just

Head Consumer Products MEE

Business Transformation Services

[email protected]

+49 151 5711 8299

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